Kakande's Investments Podcast · Kakande's Investments Podcast

Are commercial Banks In Uganda becoming Risk averse? - Podcast Discussion.

·42 min·2 clips

Alex says banks are regulated to tame profit-seeking and force them to drive commerce, not just return to shareholders.

Kakande Alex opens the conversation with a blunt question. He points to Bank of Uganda data showing government bond holdings rising from about 5.5 trillion shillings in 2017 to almost 13 trillion in 2022, while loans climbed from 11 trillion to 18 trillion, and he asks what that imbalance means for private borrowers and the wider economy. The panel quickly treats the issue as bigger than a banking trend. One participant argues that Uganda still needs a strong private sector, saying privatization and liberalization were meant to support economic activity outside government, not replace it. That point is not left hanging. The discussion then turns to what banks are meant to do, with the speakers separating profitability from responsibility and noting that financial institutions are regulated precisely because they would otherwise chase the highest return available. Deposit protection and solvency matter here. The panel also returns to the fact that banks can choose the safer road when treasury bonds offer a risk-free return, especially if private lending looks slower, messier, or harder to recover. That tension shapes the whole exchange. One speaker suggests a different way to judge bank performance. Instead of celebrating only the bank's own balance-sheet results, the discussion proposes looking at how well customers performed, including the top 100 customers who can reveal whether the institution is supporting real economic activity. That idea shifts the lens. The conversation then compares government borrowing with ordinary private spending. Loans for cars, weddings, and other consumption are set against lending that might actually increase productivity, and the speakers argue that not all borrowing deserves the same priority. Agriculture enters as the clearest example. The panel suggests that critical sectors, especially agriculture at a commercial level, should access cheaper credit because productive lending can create more value than financing everyday consumption. The tone stays practical. Throughout the discussion, the hosts keep returning to simple but stubborn questions about liquidity, risk, and what a bank is really choosing when it prefers a government security over a private loan. The argument does not drift into theory. It ends with a local, concrete concern: if banks keep chasing the comfort of government paper, who carries the cost in jobs, credit access, and private-sector growth?

As heard by us

A clear discussion of whether banks are favoring government paper over private-sector lending.

The episode follows a familiar but useful question: are banks turning cautious and channeling more money into government paper than into private borrowers?

Read the full review in PlayNext →

Why you'd press play

You want the tradeoff behind Ugandan banks favoring government bonds over private-sector loans.

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from Kakande's Investments Podcast